CDL prices first green bond in S'pore
Singapore
CITY Developments (CDL) on Thursday emerged as the first Singapore company to sell green bonds.
The property developer's unit CDL Properties priced a two-year senior secured green bond, raising S$100 million at a fixed rate of 1.98 per cent per annum. The investors were mainly financial institutions and fund managers.
Green bonds are used to fund projects that have a positive impact on the environment. Funds from CDL's first green bond will go towards repaying a S$100 million loan extended by CDL to CDL Properties, which owns Republic Plaza. Republic Plaza saves more than S$1.2 million annually by cutting energy and water consumption.
Sherman Kwek, CDL deputy chief executive officer, said: "Green finance offers us an alternative financing stream. There is an increased interest in socially responsible investments and a growing demand for relevant products."
He added that CDL's inaugural green bond links the company's sustainability initiatives with the capital markets. "(It) enables us to tap investors who are supportive of the commitment that CDL has made over the past two decades towards sustainability best practices," he said.
The green bond was prepared in alignment with the Green Bond Principles. They make up a set of voluntary guidelines encouraging transparency and disclosure of a bond's use of proceeds; project evaluation and selection criteria; management of proceeds; and ongoing impact reporting commitments, CDL said.
Sustainalytics, a ratings agency that focuses on environmental, social and governance factors, offered a second-party opinion on the robustness of the green bond framework and its environmental credentials.
This green issuance's climate bonds certification was also verified by KPMG using the Climate Bonds Standard developed by the Climate Bonds Initiative.
The green bond is issued under the CDL Properties' S$700 million secured medium term note programme. DBS is the sole bookrunner on this transaction.
Moody's Investors Service expects global green bond issuances to hit as much as US$206 billion this year. In 2016, green bond issuances worldwide stood at US$93.4 billion, more than doubling from a year ago.
